Ee 183. The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end-of-year price depend on the state of theeconomy by the end of the year as follows: Dividend Stock Price Boom dividend $2.80 stock price $48 Normal economy dividend 1.80stock price $43 Recession dividend 0.90 stock price $34a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely.(Do not round intermediate calculations. Round your answers to 2 decimal places.)b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. Thereturn on bills is 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Answered: Image /qna-images/answer/9d5104c2-1cd2-4e51-9c9e-2ba34ac01759.jpg

Answered: The stock of Business Adventures sells…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Pax World Balanced is a highly respected, socially responsible mutual fund of stocks and bonds. Vanguard Balanced Index is another highly regarded fund that represents the entire U.S. stock and bond market (an index fund). The mean and standard deviation of annualized percent returns are shown below. The annualized mean and standard deviation are for a recent 10-years period.†. Pax World Balanced: x = 9.43%; s = 14.13%Vanguard Balanced Index: x = 9.06%; s = 12.56% (a) Compute the coefficient of variation for each fund. (Round your answers to one decimal place.) Pax Vanguard CV % % Compute a 75% Chebyshev interval around the mean for each fund. (Enter your answers to 2 decimal places.) Pax Vanguard Lower Limit Upper Limit
Alex Moore is 43 years old and has accumulated $78,000 in his self-directed defined contribution pension plan. Each year he contributes $1.500 to the plan, and his employer contributes an equal amount. Alex thinks he will retire at age 60 and figures he will live to age 83. The plan allows for two types of Investments. One offers a 4% risk-free real rate of return. The other offers an expected return of 10% and has a standard deviation of 34%. Alex now has 40% of his money in the risk free investment and 60% in the risky investment. He plans to continue saving at the same rate and keep the same proportions invested in each of the investments His salary will grow at the same rate as inflation How much can Alex expect to have in his risky account at retirement? Multiple Choice $158.982 $309,530 $543781 $224,651
Assume monthly returns of 1%, -2%, 3% and 1%. What is periodic arithmetic mean, geometric mean, standard deviation, skew and kurtosis? What are the annualized values of each statistic?
Pax World Balanced is a highly respected, socially responsible mutual fund of stocks and bonds. Vanguard Balanced Index is another highly regarded fund that represents the entire U.S. stock and bond market (an index fund). The mean and standard deviation of annualized percent returns are shown below. The annualized mean and standard deviation are for a recent 10-years period.†. Pax World Balanced: x = 9.70%; s = 13.95% Vanguard Balanced Index: x = 8.88%; s = 12.35% (a) Compute the coefficient of variation for each fund. (Round your answers to one decimal place.) If x represents return and s represents risk, then explain why the coefficient of variation can be taken to represent risk per unit of return. From this point of view, which fund appears to be better? Explain. A. Since the CV is s/s2 we can say that the CV represents the risk per unit of return; the Pax fund appears to be better because the CV is smaller. B. Since the CV is s/s2 we can say that the CV represents the risk per…
The table below shows the annual return of an investor over a 5 year period. 2017 2018 2019 Year Return 15% 18% 2020 20% -2% 2021 3% Calculate the mean and standard deviation of return.
Pax World Balanced is a highly respected, socially responsible mutual fund of stocks and bonds. Vanguard Balanced Index is another highly regarded fund that represents the entire U.S. stock and bond market (an index fund). The mean and standard deviation of annualized percent returns are shown below. The annualized mean and standard deviation are for a recent 10-years period.†. (a) Compute the coefficient of variation for each fund. (Round your answers to one decimal place.) (the answers to both are not 1.4%). (b). If x represents return and s represents risk, then explain why the coefficient of variation can be taken to represent risk per unit of return. From this point of view, which fund appears to be better? Explain. A. Since the CV is s/s2 we can say that the CV represents the risk per unit of return; the Pax fund appears to be better because the CV is smaller. B. Since the CV is s/s2 we can say that the CV represents the risk per unit of return; the Vanguard fund appears to be…
The accompanying data represent the monthly rate of return of a certain company's common stock for the past few years. Complete parts (a) and (b) below. Click the icon to view the data table. (a) Determine and interpret the quartiles. The first quartile is Q1 %3D (Round to four decimal places as needed.) The second quartile is Q2 = (Round to four decimal places as needed.) The third quartile is Q3 (Round to four decimal places as needed.) Interpret the quartiles. Choose the correct answer below. A. The first quartile is the lower bound of plausible monthly returns, and the third quartile is the upper bound of plausible monthly returns. Any monthly returns outside of these bounds are outliers. The second quartile represents the most common monthly return. B. Of the monthly returns, 25% are less than or equal to the first quartile, 50% are less than or equal to the second quartile, and 75% are less than or equal to the third quartile. C. The first quartile is one standard deviation below…
Observe the mean, the standard deviation, and the CV of the annual rate of return of the portfolio. Apple Historical Annual Stock Price Data Year Average Stock Price Year Open Year High Year Low Year Close Annual % Change 2021 135.6974 129.4100 156.6900 116.3600 148.7600 12.11% 2020 95.3468 75.0875 136.6900 56.0925 132.6900 80.75% 2019 52.0640 39.4800 73.4125 35.5475 73.4125 86.16% 2018 47.2634 43.0650 58.0175 36.7075 39.4350 -6.79% 2017 37.6378 29.0375 44.1050 29.0050 42.3075 46.11% 2016 26.1510 26.3375 29.5625 22.5850 28.9550 10.03% 2015 30.0096 27.3325 33.2500 25.7800 26.3150 -4.64% 2014 23.0661 19.7546 29.7500 17.8494 27.5950 37.72% 2013 16.8798 19.6082 20.3604 13.9475 20.0364 5.42% 2012 20.5732 14.6868 25.0750 14.6868 19.0062 31.40% 2011 13.0002 11.7704 15.0800 11.2614…
Hi! I was working on the question below: The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn’t change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. And question (a) looks like: What percent of years does this portfolio lose money, i.e. have a return less than 0%? I got a z-score of -0.4455, which corresponds to the p value of 0.3264 on the z-table; I don't understand why the correct answer should be 0.3280 as said by one of the solutions, and I cannot locate such a number on the z-table. Thank you so much!
The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn't change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. (please round answers to within one hundredth of a percent) (a) What percent of years does this portfolio lose money, i.e. have a return less than 0%? (b) What is the cutoff for the highest 15% of annual returns with this portfolio?
The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are normally distributed. Suppose a portfolio has an average annual return of 14.7% (i.e. an average gain of 14.7%) with a standard deviation of 33%. A return of 0% means the value of the portfolio doesn’t change, a negative return means that the portfolio loses money, and a positive return means that the portfolio gains money. What percent of years does this portfolio lose money, i.e. have a return less than 0%? What is the cutoff for the highest 15% of annual returns with this portfolio?
After an automobile is 1 year old, its rate of depreciation at any time is proportional to its value at that time. If an automobile was purchased on March 1, 2022, and its values on March 1, 2023 and March 1, 2024, were $7000 and $5800 respectively, what is its expected value on March 1, 2028?

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